In a week of “tax talk crossfire” dominated by discussion of dividend imputation refunds, the Institute of Public Accountants has called on politicians to put aside “political banter” and instead focus on “true” tax reform that looks at all aspects of taxation.
IPA chief executive, Andrew Conway, said that the proposals currently put forward by political parties were not focused on effective or “true” tax reform, but instead just reflected that a Federal Budget and election were both looming.
“There seems to be an ‘old Macdonald had a farm’ ring to it all; with a tax cut here and a benefit loss there and no talk to total tax mix considerations anywhere,” Conway said.
While Conway acknowledged that some individuals would be either happy or alarmed by talk of company and personal income tax rate cuts and changes to imputation credit refunds, overall Australia was “missing the opportunity to get it right.”
The IPA still advocated for a Tax White Paper, which could explore the “total tax mix” and go further than the somewhat constrained Henry Tax Review.
“True reform needs to look at all aspects of taxation, including GST, and the need to eradicate nuisance taxes that exist at state and federal level,” Conway said.
He pointed to payroll tax as an example of this, saying that it acted as a disincentive to employment and growth for small entities, and should be removed.
The Institute called on political parties to “put aside rhetoric designed to attract votes” and instead focus on holistic tax reform to improve productivity and prosperity.